A deeper dive into tax policy with Indiana Farm Bureau    

Lawmakers passed several tax bills supported by Indiana Farm Bureau during the 2022 legislative session. Katrina Hall, senior director for policy strategy and advocacy with INFB, is discussing what farmers need to know as they go into effect.

House Bill 1002 will help provide relief to individual income taxpayers.

“The bill ended up being a relatively longer-term cut to the state income tax which would take our state rates from 3.23 percent to 2.9 percent over a seven-year period,” Hall says. “However, after the first two years where the tax would go from 3.23 percent to 3.15 percent, which is a relatively modest decrease, there are some other criteria that would come into effect including a certain percentage that the state’s revenue stream would have to continue to grow as well as the state paying off the remaining $9 billion debt in the teachers’ retirement fund.”

She says there will be more opportunities to provide business personal property tax relief in the future.

“Our perspective at Indiana Farm Bureau is we certainly support reductions or eliminations of business personal property tax. But, our members stated in our policy that we want to make sure that by eliminating a tax or reducing it significantly, there wouldn’t be reductions or serious impact on local governments that rely on business personal property tax,” she says. “…As far as next year, I would say there will be another review of that particular tax and what the state might be able to do to eliminate that. There’s more to come and our members will continue to look at that and property taxes in general. We’ll be looking at the trends in the farmland formula as we go into the next budget session.”

The bill also includes a 1.4 percent reduction on all utility bills beginning in July that comes from the repeal of the utility receipts tax.

Hall says Senate Bill 119 will allow new agricultural equipment and buildings that produce employment and economic opportunity to qualify for local tax abatement.

“It won’t mean that every tractor or combine will be eligible for a tax abatement, but it will certainly provide a mechanism to encourage the development of value-added opportunities that many of our farmers and food manufacturers are getting into.”

This is the first time the local tax abatement will be available for ag enterprises since ethe law was enacted in the 1980s.

Senate Bill 145 outlines regulations for commercial estate property and includes the “dark box” fix that Indiana Farm Bureau’s public policy team has been working on for several years.

 “We, and other groups, wanted to get something in the law that gave more predictability and ensured a new retail building would be assessed according to the same method, which is replacement, less depreciation,” she says. “Basically, what this bill did is help local officials assess property and keep the value of the large retail enterprises and maintain the property tax space. We worked on this bill for close to seven years. This has been a hard sell. It’s been a complicated situation to try to make sure that a tax appeal would not wipe out the value of a new retail establishment and value it like one that is vacated.”

The 2023 legislative session is a budget year. Looking ahead, Hall says broadband investment will likely be top of mind again.

“We will continue to push for that. Broadband deployment and working on the digital divide are both an economic and social equalizer,” she says. “I predict tax policy bills may end up in the budget. There will be another look at business personal property tax. The other thing I think that we’ll look at is Senate Bill 361, which is intended to help the Indiana Economic Development Corporation be more flexible and update its tools.”

She says Indiana Farm Bureau will also be watching to see what happens with funding for career and technical education, proposals for improving the public health system, and challenges facing rural communities including workforce housing. She says the organization will always advocate on agricultural issues including property rights, water rights, land use, and more.

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Audio: Katrina Hall

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